Saturday, July 8, 2017

The King of Mozzarella: "This Secretive Billionaire Makes The Cheese For Pizza Hut, Domino's And Papa John's"

" oddly compelling account "

From Forbes, June 13:
AN AVALANCHE OF CHEESE pours into the test kitchen at the Denver headquarters of Leprino Foods, the mozzarella supplier to Pizza Hut, Domino's and Papa John's. First, thin wisps of low-moisture mozzarella, then a diced alternative, followed by an "artisanal" version, cut short and wide. Then come flavored cheeses made with a mozzarella base, as well as provolone, cheddar and Monterey Jack.

Cooks bring out a take-and-bake pizza, a New York-style pie and a stuffed crust, fresh from nearly a dozen ovens. Another course features frozen food made with Leprino products, including ham-and-cheddar Hot Pockets, Stouffer's lasagna and Smart Ones baked ziti. Then come the cheese cubes marketed as snack pairings: pear flavor with nuts or Gorgonzola with pretzels. Team Leprino next brings out dessert: salted-caramel-flavored mozzarella wrapped in hot dough, rolled in cinnamon sugar. After an hour, the plastic shot glasses appear for sampling the company's lactose and whey powders, which end up in protein bars, Yoplait yogurt, Pillsbury Toaster Strudel and baby formula consumed by millions of infants annually.

Two floors above this dairy deluge, in a dark-wood-paneled office with white marble floors, Corinthian columns and gold accents, sits James Leprino, the Willy Wonka of cheese. "It's hard for me to believe I agreed to this," the 79-year-old billionaire says. "I really like to keep my privacy."
Camera shy: If you Google James Leprino’s picture, you’ll get fellow billionaire John Malone. This 1978 company portrait is the only known image of Leprino Foods’ founder (right). He speaks with former president Wes Allen (left).
Camera shy: If you Google James Leprino’s picture, you’ll get fellow billionaire John Malone.
This 1978 company portrait is the only known image of Leprino Foods’ founder (right). He speaks with former president Wes Allen (left).Getty Images
Indeed he does, to a nearly unprecedented degree, given the way he dominates his industry. Leprino has somehow eluded photographers for decades: A Google search picks up photos of fellow Colorado billionaire Philip Anschutz and cosmetics heir Ronald Lauder. There isn't a single image of Leprino on his company's website. But after nearly 60 years running the business and more than a decade on Forbes' list of billionaires, Leprino, worth an estimated $3 billion, is finally willing to be interviewed about how his family's grocery in Denver's Little Italy became the world's top producer of pizza cheese--the slightly derisive term competitors use to describe its mozzarella. In all, Leprino Foods sells more than a billion pounds of cheese a year, to the tune of $3 billion in revenue.

The little-known Leprino (he declined to be photographed for this article) rates as one of America's all-time monopolists. He lets others worry about fresh mozzarella balls and pizza that taste like they were made in the old country. His laser focus on large pizza chains has allowed him to control as much as 85% of the market for pizza cheese and somehow sell simultaneously to a set of customers — Pizza Hut, Domino's, Papa John's and Little Caesars — that try to cut each others' throat in every way that doesn't involve where they buy their milk products. Dominating the market has its advantages: He's able to invest in technology that no run-of-the-mill dairy farmer ever could, resulting in more than 50 patents —and an estimated 7% net margin, which dwarfs the dairy-industry average.

As the diamonds of his watch bezel shimmer on his wrist, Leprino takes out his beat-up black leather wallet, removes the rubber band holding it shut and reveals a card featuring the four company watchwords: quality, service, price, ethics. "I've got everybody keeping one in their pocket," Leprino says. "The company was growing so fast they were missing this important message."

Quality is listed first intentionally. It's easy to mock his product (Frankencheese, anyone?), but Leprino Foods is one of the few dairy giants that have never had a recall. Every Monday at 11:30 a.m., Leprino walks down to the test kitchen along with two dozen of his most trusted executives for the weekly Monday Melts meeting like the one I attended. The executives test samples of the cheese produced for some 300 clients in 40 countries and check every complaint received the week before. "Your employees have got to know you're not a phony," he says. "They've got to believe in you.
"I support what's going on, but I don't try to lead it," he adds. "My job is to hold them responsible for doing what they said they're going to do."

He wasn't always so hands-off. While acknowledging his "genius," numerous industry executives paint Leprino, in his younger days, as an "aggressive" leader who wasn't above visiting individual franchise owners to pitch his technologically advanced cheese. But very few will go into detail, and fewer still will attach their name to their comments. One pizza entrepreneur puts it this way about the man who owns 100% of this mozzarella giant: "Jim Leprino is a very powerful man."
 Mike Leprino Sr. stands in the original Leprino family shop selling Italian specialties
LEPRINO'S OFFICE BEARS testaments to his roots, including a black-and-white photo of his mother on her wedding day at age 16 and a bronze relief of James and his father rolling fresh mozzarella balls. Leprino Foods' genesis lies in the mountains of southern Italy, which Mike Leprino Sr. left in 1914, at age 16. Accustomed to high altitude, he settled in Denver; without much of an education or the ability to read and write English, he began farming. More than three decades later, in 1950, he finally opened a grocery store to sell the produce he grew. Italian specialties followed, including fresh ricotta, mozzarella balls and ravioli made by James' sister Angie....

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